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Time to save American manufacturing jobs

The economy and jobs now trump all other issues with American voters in the race for the presidency. This comes as no surprise as average citizens apprehensively face falling home values, a rising tide of foreclosures, angst over job security, and increasing pain at the gasoline pump.

With the April 22 primary looming, the challenge lies at the feet of the presidential candidates to convince Pennsylvania voters what specific steps they will take to jump-start the economy and rebuild our once-dominant manufacturing base.

Having grown up in Pennsylvania and having served the past three decades of my career in the steel industry, I can point to one of the most important anti-recessionary tools — revitalizing a vibrant U.S. manufacturing sector.

America's manufacturing sector continues to be an important national asset, pumping $1.6 trillion into the U.S. economy. For Pennsylvania, the manufacturing sector employs 655,300 individuals, with the average annual manufacturing salary 18 percent higher than the average annually for all other sectors.

Pennsylvania also has remained one of the top steel-producing states in the nation, as the Butler community knows well, in an industry that adds $350 billion to the national economy and 1.2 million jobs.

Every one direct steel job produces seven related jobs in other sectors. I know that A.K. Steel's Butler Works is a very important and high-quality part of the total AK Steel operation.

The problem is, some of America's trading partners have not lived up to their trading obligations and, as a result, have created market distortions denying American manufacturers, and particularly U.S. steelmakers, an equal opportunity to compete in the global marketplace.

Contrary to popular belief, it is not cheap labor that is giving these countries a competitive edge. Rather, it is a host of abusive trade practices that are causing an increasing number of prominent economists to label China as mercantilist, meaning their government's adoption of policies intended to advance their own economic and political interests at other countries' expense.

The United States is bearing the brunt of these trade practices, which violate World Trade Organization and U.S. trade laws.

The global steel market offers a revealing illustration. Topping the list is major government subsidization of the Chinese steel industry ($52 billion over the past 10 years) and expansion of excess capacity, artificial undervaluation of currency, and lax enforcement of environmental standards.

America's steel industry, whose technological transformation is returning tremendous value to its shareholders, is ready, willing and able to compete head-to-head with any steel industry in the world, but we cannot compete against governments.

Another major disadvantage to U.S. manufacturers is that the Chinese maintain a currency that is artificially undervalued, with the yuan remaining the most severely undervalued major currency in the world, making China's exports much less expensive than U.S. goods — 40 percent cheaper than they should be, by some estimates.

How can American manufacturers compete against goods sold intentionally at prices that do not reflect the value of the materials used to make those goods? The resulting trade deficit with China, according to one analysis, has seen Pennsylvania shed 78,000 jobs since 2000.

In addition, lax environmental enforcement in certain countries benefits them by minimizing manufacturing costs while causing harm to the global economy and the global ecosystem.

To counter the full range of anti-competitive practices manufacturers in the United States face in the global marketplace, U.S. policymakers need a multi-faceted approach. Congress and the president should be playing an important role in helping U.S. manufacturers compete on a level playing field.

More manufacturing jobs are going to be shipped overseas unless our next president takes a strong stand against illegal Chinese trade practices.

Pennsylvania voters deserve to hear from the candidates whether they will champion steps to deal directly with Chinese currency manipulation, illegal subsidies, intellectual property theft and other pressing China-related trade issues.

The strength of the U.S. manufacturing sector and America's economic security depend on it.

Andrew G. Sharkey III is president and CEO of the American Iron and Steel Institute (AISI). AISI's member companies produce more than 75 percent of the steel made in America. AK Steel's Butler Works is an AISI member.

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